FHA Streamline Refis- Is there a cutoff/deadline for this program?

[octavia]

I am going to do a FHA streamline refi with my current lender (BOA).  Current rate is 6.5%, new rate will be 5.25%.  Just wondering, do I have to close on my refi by a certain date to qualify for the streamline refi?  I think I read somewhere (could be mistaken) by Nov. 1.  My LO says there's no "official cutoff/deadline" for this program.

I plan on closing one day during first week of November (2nd-6th) so that my first payment won't be due till January 2010.

TIA.

Octavia.

[DallasLoanGuy]

No.

The program is going thru changes. Employmentverified now, ect.

But it isnt going away

[octavia]

Thanks for your response Dallas.

Octavia.

[ShanetheMortgageMan]

For FHA case #'s ordered on or after 11/18/09 there will be new guidelines.  Those changes are detailed at http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-32ml.doc, but a synopsis is below:

Synopsis:

FHA is implementing some significant changes for streamline refinance transactions. The new guidelines include seasoning requirements, payment history standards, a net tangible benefit test, revised maximum loan amount calculations, revised CLTV requirements, and additional certifications and verifications. An overview of the changes follows:

• At least six months seasoning on the existing FHA mortgage.
• 0 X 30 days late if seasoned less than 12 months.
• No more than 1 X 30 days late in the last 12 months if seasoned 12 months or more, and 0 X 30 in the last 90 days.
• The new mortgage must provide a net tangible benefit for the borrower.
  • When refinancing from a fixed rate to a fixed rate or an ARM to an ARM, the PITI payment must be reduced by five percent or more.
  • When refinancing from a fixed rate to an ARM, the new ARM rate must be at least two percent less than the current fixed rate.
  • When refinancing from an ARM to a fixed rate the new fixed rate may not be more than two percent above the current rate of the ARM.
  • Reducing the term of the mortgage.
• The maximum mortgage calculation has been revised for streamline refinances with and without an appraisal.

Without an Appraisal
Outstanding principal balance including 30 days interest from the first of the month
- UFMIP refund
+ new UFMIP
= maximum new loan amount

With an Appraisal
Lower of the following calculations:

Calculation #1
Outstanding principal balance including 30 days interest from the first of the month
- UFMIP refund
+ closing costs and prepaid items for a new escrow account
+ new UFMIP
= maximum new loan amount
(Discount points may not be included in the closing costs)

OR Calculation #2
97.75% of the appraised value + new UFMIP

• Lenders must certify in writing that the borrower is employed and has income at the time of the loan application.
• Verification of any funds required to close are required.
• A copy of the payoff statement must be included in the case binder.
• If credit scores are available, they must be entered into the FHA connection.
• The maximum CLTV with or without an appraisal is 125%.  (For streamlines without an appraisal the CLTV is based on the original mortgage's value.)
• TOTAL should not be used for streamline transactions.  If TOTAL is used the lender must underwrite the loan as a no cash-out refinance transaction.
• Term reduction refinance transactions are no longer eligible for streamline documentation and must be underwritten and closed as no cash-out refinances.
• Investment and second home properties may not be refinanced into an ARM.
• Lenders must use the URLA (Uniformed Residential Loan Application) form.